While basic understanding of the "book smarts" within the mortgage industry will help you understand specific terminology, loan programs, and features, there is so much more you will need to know in order to make an informed financial decision.

My approach to providing education strives to further your understanding beyond the "book smarts" of the mortgage industry, and learn the valuable "street smarts" that will help you achieve the best possible results, while avoiding the most common pitfalls that non-informed Borrowers and Real Estate Professionals have experienced.

Special thanks to Market Analyst Lou Barnes for the below economic forecast for 2011:

The present today is slipperier to evaluate than usual for an odd reason: it is so similar to the turn of last year. Hardly anything has changed. Interest rates are the same, near 5.00% for mortgages, near 3.50% for 10-year Treasurys, both expected to rise last year as now. The lack of employment is the same, and so the dearth of tax revenue (our "thing to watch" at last New Year). The economy was then expected to accelerate in a recovery assumed to be underway, making the Fed's QE1 and home-purchase tax-credits unnecessary, both to expire in spring 2010.

Those expectations were wrong, of course (and not found here), but are no impediment to forecasters today, who see the same acceleration underway. The economy is doing a little better now than in summer, but there is no new fuel for the domestic economy. In fact, compared to one year ago, headwinds are a bit stronger: the big stimulus of 2009 has washed out, leaving state and local budgets exposed; and housing is clearly in worse shape, and it is without any prospect for helpful policy intervention.

Other than non-recovery, the only two specific economic surprises in 2010: Europe fell into currency crisis, and Left-wing Democrats suffered an epic rout.

This peculiar stability begs a different kind of forecast. Sometimes an absence of visible change properly reflects an absence of underlying tension (1950s, mid-1980s to late 1990s...), and other times unsustainable trends are accumulating tension at, near, or past their breaking points but not yet broken. This forecast must also depart from the normal US-centric approach; economic globalization is happening at a pace beyond comprehension.

There are three large-scale unsustainables in play today, and all three will rupture; however, they are so very large that each could continue to build tension for years ahead. Stephen Hawking: "Time is what keeps everything from happening all at once." Nevertheless, we have felt foreshocks from all three, and all are linked: Europe's currency failure, US fiscal irresolution, and China's trade manipulation and hyperbolic growth.

Europe. You can get in a nasty fight and called a racist for saying that culture matters; for denying Jared Diamond's insistence ("Guns, Germs, and Steel") that we are all the same people, that only geography, resources, and power matter; and get in bad trouble for arguing that national and regional cultures are durable over centuries.

We mediate the relative economics of cultures via currencies. The dreamy, one-world pretense of gold has never worked for more than a few decades, and then only among the richest nations, and then ended badly.

The currencies of the most productive cultures inevitably rise in value. They sell more things to others, and receive payment; as they receive payment, those who buy are less able to pay. They either buy less, or pay with currency debased in one way or another, worth less, and by that means buy less. That devaluation allows the weak to sell their own exports. Millennia-old truths.

The euro was an attempt at cultural unity where none existed. In one short decade the euro has become deutsche gelt, a continental prison that will not allow economic adjustment. The hyper-productive Germans run export surpluses inside Europe and out, euro-gelt pouring in, to be recycled as loans to the buyers of those exports. Payments on those loans must be made in euro-gelt, which the weak have no way to earn; their exports are locked into euro-gelt prices. To be competitive, the cost of their labor must deflate, and with it their domestic assets (homes, stocks), and their ability to make payments on loans foreign and domestic.

Europe has two ways out: true union or breakup. Germany could switch to a consumer economy and become a net importer from the rest of the euro-zone, and all 16 nations could surrender sovereignty and form one treasury, one parliament, one tax code, and one welfare system.

Ain't gonna happen. Culture is durable.

Meanwhile, tension is building. Club Med cannot conceivably make payments on its current debt, and must reduce the balances owed by some form of default. Their IOUs are held by the banks of the rich, who are deep into pretense that these loans will be good. Everywhere in Europe a silent calculus is measuring the cost of continuing pretense versus breakup.

The moment of breakup will be painful, but will be mightily cleansing -- just as all shifts from the fantastic to the rational. The longer that Europe waits, the more expensive and disruptive breakup will be.

US Deficit. Our last two Presidents have been the only ones in modern times to campaign to the center and attempt to govern from a wing. Both parties have focused on their extreme "bases" in a malignant Roveism. Very odd. This country has had only one durable base: the center.

In the two months since the wing-wipeout, both parties have come to their senses, competing for the center. The Left lost the seats this time, but the Right heard the warning. Our government has gotten more done in two lame-duck months than the rest of the Obama administration and a lot of the prior put together: tax-bracket extension, partial FICA suspension, sustained long-term unemployment benefits, ratified START, and repealed don't-ask-don't-tell.

Congress-wise Joe Biden was sent up to the Hill to cut the deals, and in brutal signal did not inform his party's Left until after it was over. We have not enjoyed competence of that kind -- both parties -- since Bill Clinton cut the budget-balancing deal in '93, trading pay-go spending discipline for tax increases.

Except for the Clinton moment, the US budget has been out of control since 1963. The entire country is worried about deficits to the point of economic paralysis, terrified for ourselves and our children. Everyone in the center understands that neither the Palin nor Pelosi wings will decide the terms, and knows that nobody will be happy with the specific sacrifices, and knows the end result of fiscal discipline is absolutely necessary.

When the people are moving, politicians elbow each other to follow.

China. The all-time black box. Churchill called Soviet Russia "A riddle wrapped in a mystery inside an enigma...." China is so big and growing so fast that China itself cannot know what is happening to it.

Back to principles of trade and currencies. If you run a big trade surplus, sooner or later your currency will rise in value. You may deny, distort, contort, and delay, but sooner or later, upward revaluation is going to happen. Next, your avoidance maneuvers will have domestic consequences: you must put your wealth somewhere that it will not affect your currency, which makes you bubble-prone (see Japan). Also, if you peg your currency to another, you will import the other's monetary policy: in this case, super-easy Fed policy brings to China overheating and inflation (note the reverse in Europe, in which German-driven tight monetary policy is crushing Club Med). Your certain-to-fail peg begets speculation, everyone trying to buy yuan-denominated assets to hold for the day that the yuan soars. That anticipatory scramble reinforces the bubble and inflation pressures.

Reports from China all through 2010 describe a wage-price spiral underway. Two laws and lessons, there: we have nothing to fear from inflation here because our wages are suppressed by foreign labor competition. China has nothing to suppress its wages. Second: once a capitalist economy enters a wage-price spiral, nothing will stop it except a recession. The longer you let inflation run without the pain, the worse the ultimate discomfort; but you can run it for a long time (see US, 1968-1980). China's growth has been compounding at annual rates in excess of 10% for 20 years, the curve steepening beyond capacity some unknowable time ago.

I have no idea which of these three unsustainables will burst in 2011, if any, or all three. Each has a great deal of momentum behind it. See Japan, again: its unsustainable condition has run for 20 years, but will run on -- in 2011 spending $1.1 trillion versus $490 billion in tax revenue, borrowing 96% of the rest from itself. The three instabilities described here are more immediate than Japan. When one does break, the whole globe will feel the consequence, which will be to slow the world economy and suppress inflation.

Beyond that suppression, resolution to these three over-stressed trends will be very good news indeed. Past them, we can look forward to the next stage of global commerce, and nothing in economic history has held so much promise for the standard of living and well-being of mankind.

Not all Mortgage Lenders are alike! Find out what Clients, Real Estate Agents and other Financial & Legal Professionals have to say about Jason Gordon.

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